PDL Solutions based in Hexham is a thriving company in a thriving subsea sector.
Since its foundation, the engineering consultancy has seen 14 years of steady and profitable growth and, apart from Hexham, has established bases in Houston, Texas, and Singapore.
Chief executive Paul Charlton is optimistic that this can continue into the future. In fact, he predicts that the business will triple in size over the next three years on three continents, with annual turnover rising from £2m to £6m. It currently employs 40 people and he expects that to grow to 70 people over the next three years in the three regions.
PDL provides advanced engineering design and analysis consultancy services to clients operating in predominantly three main energy sectors – oil and gas, nuclear and offshore renewables. The split of the business is approximately 80% oil and gas, 10% nuclear, 10% renewables.
Charlton explains: “On the oil and gas base, we are heavily subsea related, and what we do are analytical services – we mitigate risk, we shorten development timescales and we reduce development costs. We do all the upfront analysis work. It’s just simulation. We take a model of whatever it is that’s going to go down there and we apply all the material properties to that model. We apply all of the loads that it’s likely to see over a 25 or 30 year period and we crunch some big numbers and we say if it’s up to the job or not. When it isn’t, we then work with the client to change things, repeat the analysis until everything goes green, and then we say yes, it’s fit for use.’’
PDL Solutions works with clients to extend the life of current subsea assets, on the design of new equipment and on decommissioning.
It would work, for example, with a manufacturer such as SMD to find the most optimal shape for a Remotely Operated Vehicle, (ROV), to reduce drag and lift.
“We’ll then work with them to ensure from a structural point of view, the chassis is up to the job, and then we’ll run the fatigue analysis to ensure that it will withstand so many millions of cycles of operation, in a whole host of different environments,’’ says Charlton.
“So we’re very much complementary to the in house engineering team of the likes of SMD. We do not have a product ourselves personally, we work with our clients’ engineers to help them optimise their product and ensure that it’s fit for purpose.’’
Easy to extract oil has been taken around the world. Considerable reserves remain but they are in harsher environments and harder to reach places. For subsea this means that technologies must be developed to operate in deeper waters.
Offshore platforms represent huge capital investments and, to make the most of them in the North Sea, companies now seek to sink so-called in-fill wells which feed back to the original platforms to keep their production at a constant level. This requires a huge subsea infrastructure to tie back from the in-fill wells to the original platforms which could be as long as 150km.
“It’s in everyone’s interests to leave those aging assets out in the North Sea for as long as possible, because once they’re gone, they’re gone,’’ says Charlton. “So the operators are doing what they can to find these in-fill wells as far away from these assets as possible and then tie them back.’’
In the North Sea, that’s even harder than it sounds.
Charlton says: “The challenge is that in the deep water you’ve physically got to deploy something. Now in the UK CS [Continental Shelf] it’s only, say, a thousand metres water depth to the west of Shetland. But, you’ve got to do that in high sea states, and you only have an operating window of four to six months in any year, because then the weather just comes against you.
“So in deep water, you’ve got to deploy big yellow things – as we call them – you’ve got to deploy this big, heavy subsea infrastructure through a thousand metres of water, in high sea states. That requires a big vessel and that requires new technology.’’ These challenges become even more extreme further north into the Arctic Circle.
“There you need different kinds of vessels that can operate in that environment. You need to come up with technology to then deploy things on the seabed, through the icecap.
You then need to have new technology to enable them to operate for 40 years in
With longer tie-backs another challenge is to ensure that the fluids flow from the well and to do that over distances of 100km to 150km they need to be boosted, to be kept warm, and within the parameters of an ideal mix to avoid wax deposition that can render a pipeline unusable.
“So you’ve got three challenges, but you’ve got one common solution, and that’s new technology,’’ says Charlton. “The subsea industry globally, and especially the subsea industry in the UK, which is the global leader right now, needs to have technology at the top of its agenda, if it’s going to maintain its leadership position.’’
Depending on which report you read there are between 12bn and 24bn barrels of oil and gas left to be extracted from the UK Continental Shelf. The Government commissioned Sir Ian Wood to undertake a review of what was needed to maximise the remainder of the reserves. The result was the The Wood Review, one of the key recommendations of which was the development of new technology and the accelerated development of new technology.
Charlton argues: “The Wood Review will have a massive impact on the next 30 or 40 years of the UK CS. I’m not a betting man, but from where I sit right now, the only technology that’s going to enable the extraction of that 12-23 billion barrels of oil is subsea.’’
New technology is Charlton’s key interest.
Not only is he chief executive of PDL Solutions, he is also chairman of NOF Energy, a board member of the National Subsea Research Initiative and chairman of the research and technology theme group within Subsea
Subsea North East has four basic aims:
Charlton says: “On the research and technology side of things, our remit is to ensure that the operators and the subsea systems suppliers are aware of the expertise that already exists in the North East of England and then to ensure that the region is one of the go-to places to develop this new technology to overcome these challenges in the deep waters, the harsher environments and the longer tie-backs.
“How are we going to do that? By ensuring that universities in the region are providing appropriate courses to develop the people, but that they’re also working on appropriate research programmes to develop the appropriate technology. So we at Subsea North East are working with the local universities, to tell them what the industry needs are, to give them the opportunity to address those needs by running appropriate research programmes.’’
He cites, as a classic example of this, Neptune Subsea Research Centre, next to the former Swan Hunter Yard. Subsea North East worked closely with Newcastle University on this to identify the areas of interest of subsea companies from all over the North East and also a number of the major subsea systems suppliers and the major operators globally.
“We need to appeal to a much wider audience. Our customers are not in the North East of England, typically they’re not even in the UK, they’re global companies,’’ says Charlton. “We need to make sure that areas of interest that we as North East companies are working on are applicable to the global market. We’ve done an exercise whereby we create a spreadsheet of all of the areas of interest by all of the Subsea North East group companies plus two major operators, global international oil companies and three subsea systems suppliers. We then worked with Newcastle University to find about 38 areas
of interest and from those 38 areas of interest we developed four themes.’’
The themes are:
Charlton says: “Having done this analysis up front and this engagement with the operators and with the subsea systems suppliers, we’re now signalling to the likes of the National Subsea Research Initiative, to the oil and gas innovation centre, to the industry technology facilitator, and also to the oil and gas technology leadership board, that the Neptune Centre is on the map, that it’s based in the North East of England and it has, or it will have, the capability to address these four themes, which ultimately address the three major challenges of the subsea space.
“When we get this right, what that’s going to do is it’s going to be a draw for engagement with and investment from the global subsea market. That’s the position that we want to get to for the Neptune Centre.’’
The North East is a world-beater in subsea technology but it cannot afford to rest on its laurels – other countries are challenging its position.
As Charlton warns: “The likes of Brazil and Norway invest an incredible amount of money in research in the subsea space.
“If the UK is not careful, it’s going to fall behind. Well, it’s already behind Brazil and Norway in terms of investment in research, but we still have a technology advantage based on history.
“Unless we develop technology now to address these new needs, the UK is going to lose its position as number one.’’